Page 30 - Barclays Bank (B)

Foreign Exchange Fine

WHAT IS FOREIGN EXCHANGE

Foreign exchange (FX) is the

mechanism by which the currency of
one country gets converted into the currency of another country.

This conversion is done by the banks who deal in foreign
exchange. These banks maintain stocks of currencies in the form

of balances with banks.

The Foreign Exchange Market

Exchange
rate

The
Converting Foreign Reducing
currencies Exchange risk
Market

Foreign
exchange
risk

The FX market is a market for converting the currency of one
country into the currency of another. It relates to:

Exchange rate: The rate at which one currency is

converted into another